Abstract
In drought years, most residents fail to improve water use efficiency due to residential water supply normally being prioritized in many regions, which makes other low-priority industrial water users suffer more from water shortage. This paper proposes a Pricing Strategy for Residential Water (PSRW), a water tariff that changes on annual time scale, based on the scarcity value of water resources, aiming to promote residential water conservation and reallocate water resources across the residential and industrial sectors during droughts. An optimization model to maximize the total benefit of residents and industrial sectors is introduced based on marginal benefit and price elasticity. The water shortage of industrial sectors is used to reflect the scarcity of water resources, and the lowest water supply standard for households and the maximum proportion of household water fee expenditure (HWFE) to household disposable income (HDI) are used to ensure the residents’ acceptability to price raising. It shows an “S-type” relationship between the optimal price raising coefficient and industrial water shortage, and two turning points are found in the curve, which are the starting and stopping points of price raising. The appearance of starting point depends on the non-negative net benefit, and the stopping point is affected by the factors that represent the residents’ acceptability to price raising. The application to Tianjin, a city in northern China with the rapid growth of population and economy but scarce water resources, shows PSRW is a potential means to improve water efficiency and optimize water resource allocation in water scarcity situations.
Highlights
In recent years, with the influence of climate change and high-intensity human activities, extreme regional droughts happen frequently and severely, and water supply security in mega-cities becomes more and more prominent
Due to the water supply priority rules adopted in most regions, it is possible that the marginal benefit of low-priority water users who suffer more water shortage is greater than that of high-priority water users in drought years
We develop a Pricing Strategy for Residential Water (PSRW) in drought years, which is a water tariff that changes on an annual time scale, clarifying the starting conditions for a price increase during droughts
Summary
With the influence of climate change and high-intensity human activities, extreme regional droughts happen frequently and severely, and water supply security in mega-cities becomes more and more prominent. The above phenomenon makes other low-priority users (e.g., industrial water users) suffer more from urban water shortage, leading to the simultaneous occurrence of water waste for high-priority users and water shortage for low-priority users To solve this problem, water administrative departments in many regions have begun to intervene in residential water use [2,3]. Prescriptive regulation could change residential water use behaviors to some extent, water pricing policy is potentially a more effective means to foster urban water conservation, while maintaining equity in scarcity situations [5,6,7,8,9]. Due to the water supply priority rules adopted in most regions, it is possible that the marginal benefit of low-priority water users (e.g., industrial water users) who suffer more water shortage is greater than that of high-priority water users (e.g., residential water users) in drought years. It is necessary to establish a dynamic water pricing strategy based on the marginal benefit of water use so that more water could be saved and allocated to users with higher marginal benefits, thereby increasing water use efficiency and social benefits [19]
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
